Domestic stock markets continued their gains for the sixth consecutive day on Monday, with the Sensex and Nifty rallying over 1.3 per cent, driven by inflows from foreign investors, value buying and on expectations of better corporate earnings in the fourth quarter of the current fiscal.
The BSE’s Sensex soared 1.4 per cent, or 1,078.87 points to close at 77,984.38. The broader Nifty 50 gained 1.32 per cent, or 307.95 points, to finish at 23,658.35.
“Short covering ahead of monthly F&O (futures and options) expiry later this week fuelled the rally as Sensex breached the psychological 78,000-mark intra-day on across-the-board buying. Renewed optimism by foreign investors after a sharp fall in local currency coupled with strong US and European market cues further bolstered the sentiment,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
Improving macros of the Indian economy and fair valuations have turned foreign portfolio investors from sellers to buyers, he said. Last week, the domestic market saw moderation in selling pressure from foreign funds with outflows narrowing to Rs 1,794 crore.
Moderating domestic inflation and hopes of further cuts in interest rates have temporarily offset the concerns of tariff-related global uncertainty, he said. The Reserve Bank of India (RBI) is expected to cut the repo rate by 25 basis points (bps) in its upcoming monetary policy which will be announced on April 9, according to analysts.
“The domestic market experienced a robust rally, spurred by value buying as valuations returned to long-term averages and early indications of earnings growth recovery emerged,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Increased government spending and expected monetary easing are anticipated to boost optimism in rate-sensitive sectors such as banking, NBFCs, auto, consumer durables, and real estate, leading to potential outperformance.
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The sustainability of this trend will depend on upcoming PMI data, Q4 earnings results, and developments related to reciprocal US tariffs,” Nair said.
The mid and small-cap segments continued their winning streak for the sixth sessions, mirroring the overall market’s strength. The Nifty Midcap 100 index rose by 1.3 per cent and the Nifty Smallcap 100 index surged by 1.1 per cent.
All the sectoral indices ended in the green. Amongst them, Nifty PSU Banks, Nifty Private Banks, Reality and oil/gas were major gainers.
“By surpassing 23612, Nifty has retraced more than 38.2 per cent of the entire downswing seen from all-time high of 26,277 to the recent swing low of 21,964. Immediate resistance for Nifty is seen near its previous swing high of 23,807 levels, while far resistance is seen at 50 per cent retracement placed near 24,125 levels. Support has shifted upwards at 23,400,” said Nandish Shah – Deputy Vice President, HDFC Securities.
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